How Bad Is Our Infrastructure, Really?

There's no doubt that we should be spending more on our roads and bridges and water systems. But what's more important is how we spend it.

Americans have been hearing about the nation's infrastructure crisis long enough for belief in the need for additional infrastructure funding to become part of our collective DNA. But how can government officials figure out how great the need really is? And once they do that and identify a way to pay for the work that's needed, how should they allocate the new money?

This week, the American Society of Civil Engineers released its quadrennial "Report Card for America's Infrastructure." It finds that the nation's energy networks and road, bridge, rail and water systems will require $3.6 trillion by 2020 to bring them up to snuff, about $1.6 trillion more than current spending levels provide for.

ASCE's earlier "Failure to Act" economic report series estimated that the additional investment would eliminate a drag on the national economy equal to the entire GDP of Germany while protecting 3.5 million jobs and $3,100 annually in personal disposable spending.

But a report issued last year by the Reason Foundation, a Los Angeles-based free-market think tank, painted a more optimistic picture. After analyzing national highway data from 1989 to 2008, the Reason study found that road and bridge conditions had improved in almost every state during that time. The report also found that inflation-adjusted highway spending had increased by 60 percent over 20 years to $145,000 per mile.

But even civil engineers who would benefit handsomely from more infrastructure spending and a free-market think tank that espouses limited government can find some areas of agreement. While ASCE decried the funding shortfall, the grade the organization assigned to America's infrastructure this time rose--albeit barely, from a D to a D-plus. It was the first time the grade has risen in the 15 years ASCE has conducted the study.

ASCE attributed the improvement to an increase in private financing for public infrastructure projects (which Reason would certainly applaud), renewed state and local attention to infrastructure, and the 2009 federal stimulus legislation. Reason, on the other hand, found only modest linkage between how much states spent and how much progress they made.

None of this addresses the critical question of how to spend infrastructure dollars. Phineas Baxendall, a senior analyst with the public-interest advocacy group U.S. PIRG, told the New York Times that "one of the things the stimulus got right was to invest in repair rather than new capacity."

Current events in Massachusetts highlight both the dangers of blind trust in figures like the ASCE's and the importance of spending infrastructure dollars wisely.

Gov. Deval Patrick is proposing to spend more than $1 billion annually on transportation infrastructure over the next decade on top of what the state is already spending. Rather than using all the money to bring the system to a state of good repair and pay down debt (the Boston-area transit system alone owes $8.9 billion in principal and interest), the plan would fund a series of what might charitably be called "aspirational" new projects, such as train service between Manhattan and the small western Massachusetts city of Pittsfield.

Even worse, it low-balls construction costs and doesn't account for additional operating and maintenance expenses, a central cause of the Bay State's current transportation funding crisis.

I have not, as President Obama once said about the federal budget, gone through either the ASCE or Reason studies "line-item by line-item." But experience suggests that the reality of America's infrastructure situation probably lies somewhere in between the two.

And when they start figuring out how to distribute the money, they would be well served to remember something else Phineas Baxendall told the Times: "Pothole repair is always a shovel-ready endeavor."

Much of our infrastructure is invisible to its users, and so are some of its costs. Those problems can be addressed in ways that can hold down the costs of infrastructure and make it more self-sustaining.
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